Mayor Dean proposes privatizing Bordeaux, Knowles homes

Mayor Karl Dean is proposing to relinquish control of the city’s nursing home and assisted living facilities to private entities in a move that officials contend will save money, improve the quality of care for residents and create future development opportunities.

The city’s plan, which still requires Metro Council approval, involves turning over the facilities to a pair of developers and health care providers that would phase out Metro’s stake in the 419-bed Bordeaux Long-Term Care and the 100-bed Knowles Home Assisted Living facilities.

City officials, who say no residents will have to move as a result of the changes, will notify residents about the plans today.

As for employees, the city says that about 32 nonclinical positions — out of a total of 282 — would be eliminated under the new arrangement. Officials said they would try to find other jobs for displaced workers within the city’s hospital authority.

The city-owned Nashville General Hospital at Meharry will not be affected, although the city continues to review options for the hospital, which operates at a loss for the city.

The plan would make Nashville the latest city in Tennessee to get out of the nursing home business. It would also eliminate a current $10.5 million city subsidy needed to operate the two facilities.

Dean’s administration has reached a preliminary agreement with Signature Healthcare, a Kentucky-based company that owns about 90 nursing homes across the country, that would pay the company $1.3 million to operate 260 licensed beds at the Bordeaux facility for at least the next 10 years. The facility currently serves around 220 residents daily, down from 350 just a few years ago.

Signature Healthcare would also operate a new $18 million, 168-bed nursing facility near Skyline Medical Center that would be built by senior care developer Ed Street Co., which has developed similar projects in Tennessee. Current Bordeaux residents could choose to move to the new facility or remain on the Bordeaux campus.

Tennessee is a “certificate of need” state, meaning the transfer of the Bordeaux facility could take as long as two years because of state action required to open the new facility.

To end its ownership of the Knowles facility, Metro would enter into a 10-year lease with Assisted Living Partners, an affiliate of Nashville-based Vision Real Estate Investment Corp. MJM Associates would manage the facility. Vision would pay $500,000 for the facility, plus $1,000 a year over the life of the lease. It also would invest $300,000 in upgrades into the new building. All 42 employees there would be offered employment.

Redevelopment plan

In the long term, Vision would have the option to purchase an additional 44.6 acres of Metro-owned land at the Bordeaux campus, giving them 76.6 acres in all. The group has a redevelopment plan that would call for a combination of senior apartments, town homes and affordable housing at the site, as well as future nursing facilities. Total investment in those new residential buildings could eventually top $34 million, city officials said. Dean also intends to convert an additional 400 acres at the Bordeaux campus into public park space.

Metro reached out to more than 100 potential buyers for the facilities, but eventually started serious discussions with six companies. Dean said the city wasn’t interested in closing the facilities or selling the land off to a developer.

The mayor said the move doesn’t signal the fate for Nashville General, either. “I wouldn’t read anything into this in terms of privatization of General at all.”

Davidson County has maintained health services in predominantly African-American Bordeaux for more than a century. The Metro Nashville Hospital Authority, which oversees the city’s three care facilities, has seen its overall subsidy decline from $47.5 million $38.7 million this year.

Dean’s administration intends to brief the Metro Council on the proposal early next month, and the first of three votes could be held before the end of the month.

Hospital may benefit

Councilman Jerry Maynard, who chairs the council’s Health, Hospital and Social Services Committee, said privatizing the centers would allow Metro to strengthen Nashville General by putting the city’s entire health care subsidy behind the hospital. “I believe that’s our moral, legal and ethical obligation — to provide a public, safety-net hospital,” he said.

Signature has a history of buying troubled facilities and trying to make them profitable. That will be challenging with Bordeaux, since nearly all the residents are covered by TennCare, the state’s version of Medic­aid. Signature’s strategy includes renovating aging facilities and offering a suite of services, some of which will attract patients on Medicare Advantage, which receives better reimbursement rates than Medicare or Medicaid.

“We have a pretty impressive track record of similar situations,” said Joe Steier, president and CEO of Signature Healthcare. “We have to come in, respect the heritage and expand the services.”

Reach Shelley DuBois at 615-259-8241 and on Twitter @shelleydubois. Reach Joey Garrison at 615-259-8236 and on Twitter @jgarrison.

WHAT'S NEXT?

For residents, employees: City officials will start notifying residents, families and employees of the plans beginning today.

For Metro Council: City officials are expected to take the plan before the council in early February, with a first vote coming by late February.